Trending

currency markets

Hedge funds, which experienced sharp drops in assets during the credit crisis, now hold an all-time high of more than $2 trillion in capital, according to a new survey by Hedge Fund Research Inc. The figure is 50% higher than crisis-driven lows reached in the first quarter of 2009.

After years of exhorting China to increase the value of its yuan, the currency is finally rising: It has appreciated some 3.5% since June while China battles inflation and works to cool its red-hot economy. Here's how the Fed managed to succeed where political wrangling fell short.

The U.S. finds itself on the wrong side of the currency manipulation argument this week, as many G20 countries criticize the Fed's $600 billion bond buying plan, which could further devalue the dollar. World leaders say the move breaks the vow of unity made during the last G-20 summit.

Toyota may build another factory in Mexico to produce small cars as the world's largest automaker shifts more capacity outside Japan to remain competitive. The yen's strength on world markets is said to be prompting the move.

The U.S. dollar traded near an eight-month low against the euro on bets that the Federal Reserve will signal it is willing to buy more government debt in order to stimulate the economy.
The U.S. dollar traded at $1.3940 per euro as of 11:08 a.m. in London, Bloomberg News reported. It fell to $1.4012 earlier today and reached $1.4029 on Oct. 7, the weakest since Jan. 28.

China denounced a bill passed by the U.S. House of Representatives that aims to push up the value of the Chinese currency.
The bill, which would let U.S. companies petition for duties on Chinese imports to compensate for the impact of the weak yuan, would hurt the global economy if it became law, the Chinese government said today.

Countries from Japan to Brazil and Mexico to Malaysia are trying to intervene in currency markets to alter the value of their currency. The widespread dependence on exports is the prime reason for these moves, which can be tricky and even backfire.

With its economy growing rapidly even as much of the developed world struggles, tensions are mounting. China has recently crossed Japan and India, in addition to ongoing conflicts with the U.S. Fairly or not, China is being singled out as currency manipulator.

The yen tumbled as much as 3% in today's trading as the Bank of Japan intervened in the currency markets by buying dollars and selling yen in an attempt to halt the surge in the value of the yen. Investors plowed money into exporters, sending the Nikkei up 2.3%. Hong Kong's Hang Seng inched up 0.1% and in China, the Shanghai Composite sank 1.3%.

The yen eased down a bit on Wednesday from the 15-year and nine-year highs it set Tuesday against the dollar and the euro respectively, with the market watching for possible intervention from Tokyo to curb the currency's rise, which threatens Japan's fragile economic recovery.

A report from the U.S. Treasury Department avoided naming China as a currency manipulator, saying instead that the yuan is "undervalued."
The report said that the recent Chinese decision to end the peg to the dollar was a "significant step," and pledged to monitor the Chinese currency in the next three months, Bloomberg News reported.